SBA expanding small-business lending options
Cassius Butts | 6/5/2015, 3:18 p.m.
There’s a hunger among entrepreneurs to find financing to get their business off the ground or to take the next big step in their expansion plan. Across the country, thousands of small businesses are searching for term loans, equipment financing, lines of credit, invoice financing, and real estate loans to help them hire employees and grow. But often it is difficult to find the time to seek that lucky break.
This is where technology steps in. Online matchmaking services pairing lenders with prospective borrowers comprise a multibillion-dollar industry. Perhaps you’ve seen the TV commercial in which a creditworthy home buyer goes online and is delighted to find banks competing to finance her house. Small-business lending is the next frontier for these matchmaking services. Using the power of the Internet, commercial lenders are finding creditworthy small-business borrowers, while entrepreneurs are finding loan officers who are ready to sit down and talk.
The U.S. Small Business Administration not only supports this concept, we are actively implementing it. Recently, SBA Administrator Maria Contreras-Sweet announced a new SBA initiative called LINC – Leveraging Information and Networks to Access Capital. Our matchmaking service will help entrepreneurs get a viable date with a lender.
We spent months surveying our lending partners to discern what information they need before they’re ready to receive a loan pitch. Based on those talks, we’ve developed a simple online form with 21 questions that takes minutes to fill out. Once completed, the form is blasted out to participating SBA lenders in an applicant’s county as well as financial institutions with a statewide or national reach.
While a positive “hit” won’t ensure entrepreneurs will receive a loan, it will put them on a fast track because they will have been pre-screened. If LINC doesn’t produce an immediate match, entrepreneurs will be directed to their local SBA adviser for additional assistance with their loan application.
LINC is expanding small-business lending options beyond someone’s local bank. Technology can help them get their foot in the door on their merits at one of many commercial lenders. SBA is committed to becoming as innovative as the small businesses we serve.
The SBA is connecting small-business owners with nonprofit lenders that offer free financial advice and specialize in microlending, smaller loans (our Community Advantage program), and real estate financing (our 504 loan program).
We have also added more traditional banks that offer an even wider array of financial products into LINC. In the longer term, we also believe LINC could be modified to facilitate government contracting by connecting eligible small businesses with procurement officers, prime contractors, and federal buyers.
The future is upon us, and the SBA is proud to be leading the way.
To learn more about LINC or to begin your small-business matchmaking process, please visit www.sba.gov/tools/linc.
Cassius Butts is the Atlanta regional administrator of the U.S. Small Business Administration.